It was to on Wednesday attempt to woo advertisers with new data showing it can reach about 19 million monthly British viewers – almost a third of the population. Overall, Amazon said it had a global ad reach of about 200 million – the average monthly potential viewers of ad-supported Prime Video with more than half in the US.
Day said that Prime Video had deliberately launched earlier this year with a “very light ad load” – for example, no ad breaks in the middle of a programme – which had been a “gentle entry into advertising that has exceeded customers’ expectations in terms of what the ad experience would be like”.
The e-commerce group automatically flipped its more than 200 million total global subscribers to its ad-supported service, unless they actively chose to pay more for the premium ad-free service.
Day said: “We know it was a bit of a contrarian approach to take to things from us. But ... it’s actually gone much better than we even anticipated.”
She said that “churn” – when a customer leaves the Prime service – had also “been much, much less than we anticipated ... we haven’t really seen a groundswell of people churning out or cancelling”.
Day declined to say how many customers had moved to pay more for their ad-free tier but said it was below the figure estimated by some analysts of 20%.
Amazon will also unveil interactive and “shoppable” ad formats for Prime Video. Viewers will be able to add an item to their cart, or learn more about a brand, by simply clicking their remote or scanning their mobile device, without having to leave shows on the streaming service. Amazon is seen by rivals and analysts to have a uniquely strong ability to convert advertising to sales on its own retail platform.
Ads have become a fast-growing and highly profitable source of income for Amazon in recent years. Revenues from its digital advertising business rose a fifth to US$12.8 billion during the second quarter of 2024 compared with the year before.
Some production companies have raised concerns that streaming services have been cutting back on their spending on new shows, following an initial splurge as they battled for subscriber growth.
But Day said Amazon had overall increased spending on content for Prime, including more on live sports rights. She also confirmed plans for live news coverage of the US election and said live sports, such as the National Football League’s Thursday Night Football, and events such as music, would continue to be important.
Viewing numbers had also increased this year, she said, on the back of original content such as Mr & Mrs Smith, Road House, Fallout and Rings of Power. Next year, she pointed to a strong number of new shows, such as the next series of Fallout, and movies starring Will Ferrell and Reese Witherspoon.
Written by: Daniel Thomas
© Financial Times
